<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THE FINISH LINE
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
June 7, 1996
Dear Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of Stockholders
of The Finish Line, Inc. on Thursday, July 18, 1996, at 9:00 a.m., to be held
at the Finish Line retail store located at 49 W. Maryland, Indianapolis, IN
46225 on the third floor of the Circle Centre Mall in downtown Indianapolis.
Members of your Board of Directors and management look forward to greeting
those stockholders who are able to attend.
The accompanying Notice and Proxy Statement describe the matters to be acted
upon at the meeting.
It is important that your shares be represented and voted at the meeting.
Whether or not you plan to attend, please sign, date and mail the enclosed
proxy card at your earliest convenience. If you attend the meeting, you may
withdraw your proxy and vote in person.
Your interest and participation in the affairs of the Company are greatly
appreciated.
Respectfully,
/s/ Alan H. Cohen
Alan H. Cohen,
Chairman of the Board
and Chief Executive Officer
<PAGE>
THE FINISH LINE, INC.
3308 NORTH MITTHOEFFER ROAD
INDIANAPOLIS, INDIANA 46236
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 18, 1996
----------------
TO THE STOCKHOLDERS OF THE FINISH LINE, INC.:
Notice is hereby given that the 1996 Annual Meeting of Stockholders of The
Finish Line, Inc. to be held at the Finish Line retail store located at 49 W.
Maryland, Indianapolis, IN 46225 on the third floor of the Circle Centre Mall
in downtown Indianapolis on Thursday, July 18, 1996 at 9:00 a.m., for the
following purposes:
1. To elect six directors; and
2. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only stockholders of record at the close of business on June 3, 1996, will
be entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof.
By Order of the Board of Directors,
/s/ David M. Fagin
David M. Fagin,
Executive Vice President and
Secretary
Indianapolis, Indiana
June 7, 1996
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT, ACCORDINGLY, YOU ARE ASKED TO COMPLETE, SIGN, DATE
AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
THE FINISH LINE, INC.
3308 N. MITTHOEFFER ROAD
INDIANAPOLIS, INDIANA 46236
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
JULY 18, 1996
----------------
GENERAL INFORMATION
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are being mailed on or about June 7, 1996 in connection with the
solicitation of proxies by the Board of Directors of The Finish Line, Inc.
("TFL" or the "Company") for use at the 1996 Annual Meeting of Stockholders of
the Company (the "Annual Meeting") to be held at the Finish Line retail store
located at 49 W. Maryland, Indianapolis, IN 46225 on the third floor of the
Circle Centre Mall in downtown Indianapolis, on Thursday, July 18, 1996, at
9:00 a.m., and any adjournment or postponement thereof. At the Annual Meeting,
the Company's stockholders will be asked to elect six directors, and to vote
on such other matters as may properly come before the Annual Meeting.
Throughout this Proxy Statement, fiscal 1996, fiscal 1995 and fiscal 1994
represents the fiscal years ending February 29, 1996, February 28, 1995 and
February 28, 1994, respectively.
PERSONS MAKING THE SOLICITATION
The Company is making this solicitation and will bear the expenses of
preparing, printing and mailing proxy materials to the Company's stockholders.
In addition, proxies may be solicited personally or by telephone or fax by
officers or employees of the Company, none of whom will receive additional
compensation therefore. The Company will also reimburse brokerage houses and
other nominees for their reasonable expenses in forwarding proxy materials to
beneficial owners of the Class A Common Stock.
VOTING AT THE MEETING
Stockholders of record at the close of business on June 3, 1996 of the
Company's Class A Common Stock, par value $.01 per share ("Class A Common
Stock"), and Class B Common Stock, par value $.01 per share ("Class B Common
Stock"), are entitled to notice of and to vote at the Annual Meeting and any
adjournment or postponement thereof. On that date, 4,105,362 shares of Class A
Common Stock and 6,234,537 shares of Class B Common Stock were outstanding and
entitled to vote. Each outstanding share of Class A Common Stock entitles the
holder thereof to one vote and each outstanding share of Class B Common Stock
entitles the holder to ten votes.
The six nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to be voted for them shall be
elected as directors. Votes withheld from any director are counted for
purposes of determining the presence or absence of a quorum for the
transaction of business. The Company believes that abstentions should be
counted for purposes of determining whether a quorum is present at the Annual
Meeting for the transaction of business. In the absence of controlling
precedent to the contrary, the Company intends to treat abstentions with
respect to the election of directors in this manner. The Company intends to
count broker non-votes as present or represented for purposes of determining
the presence or absence of a quorum for the transaction of business.
Stockholders do not have the right to cumulate their votes in the election
of directors.
1
<PAGE>
REVOCABILITY OF PROXY
A proxy may be revoked by a stockholder prior to the voting at the Annual
Meeting by written notice to the Secretary of the Company, by submission of
another proxy bearing a later date or by voting in person at the Annual
Meeting. Such notice or later proxy will not affect a vote on any matter taken
prior to the receipt thereof by the Company. The mere presence at the Annual
Meeting of a stockholder who has appointed a proxy will not revoke the prior
appointment. If not revoked, the proxy will be voted at the Annual Meeting in
accordance with the instructions indicated on the Proxy Card by the
stockholders or, if no instructions are indicated, will be voted FOR the slate
of directors described herein, and as to any other matter that may be properly
brought before the Annual Meeting, in accordance with the judgment of the
proxy.
2
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 3, 1996, information relating to
the beneficial ownership of the Company's common stock by each person known to
the Company to be the beneficial owner of more than five percent of the
outstanding shares of Class A Common Stock or Class B Common Stock, by each
director, by each of the executive officers named below, and by all directors
and executive officers as a group.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP AS OF JUNE 3, 1996
-----------------------------------------------------------
CLASS A CLASS B
----------------------- -------------------------
NUMBER OF % OF NUMBER OF % OF TOTAL
NAME SHARES(1)(2) CLASS(10) SHARES(1) CLASS(10) SHARES
---- ------------ --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Alan H. Cohen........... -- -- 1,829,529(3) 29.3% 1,829,529
David I. Klapper........ -- -- 1,829,529(3)(4) 29.3% 1,829,529
David M. Fagin.......... -- -- 1,194,368(5) 19.2% 1,194,368
Larry J. Sablosky....... -- -- 1,311,241(6) 21.0% 1,311,241
Joseph W. Wood.......... 4,000(7) -- -- -- 4,000
Steven J. Schneider..... 40,101(7) (9) -- -- 40,101
Donald E. Courtney...... 43,000(7) (9) -- -- 43,000
George S. Sanders....... 7,700(7) (9) -- -- 7,700
Michael L. Marchetti.... -- -- --
Jonathan K. Layne....... 7,000(7) (9) -- -- 7,000
Jeffrey H. Smulyan...... 17,000(7) (9) -- -- 17,000
FMR Corporation (8)..... 471,600 11.3% -- -- 471,600
82 Devonshire Street
Boston, MA 02109
All directors and
executive officers as a
group (11 persons)..... 118,801 2.8% 6,164,667 98.9% 6,283,468
</TABLE>
- --------
(1) Each executive officer and director has sole voting and investment power
with respect to the shares listed, unless otherwise indicated and the
address for the executive officers and directors is: 3308 N. Mitthoeffer
Road, Indianapolis, Indiana 46236.
(2) If shares of Class B Common Stock are owned by the named person or group,
excludes shares of Class B Common Stock convertible into a corresponding
number of Class A Common Stock.
(3) Includes 300,706 shares of Class B Common Stock held as Trustee of various
trusts for the benefit of his minor children.
(4) Includes 342,857 shares held by Mr. Klapper as General Partner of a family
partnership.
(5) Includes 33,054 shares held by Mr. Fagin's spouse and includes 6,582
shares held by Mr. Fagin as custodian for his minor children. Excludes an
aggregate of 76,452 shares held by Mr. Fagin's son and daughter who are
over the age of 21 and also excludes 1,481 shares held by Mr. Fagin's
granddaughter. Mr. Fagin disclaims beneficial ownership of all securities
held by other members of his household.
(6) Includes 200,000 shares of Class B Common Stock held as Trustee of two
trusts for the benefit of his minor children. Includes 4,984 shares held
by Mr. Sablosky's spouse and includes 5,816 shares held by Mr. Sablosky as
custodian for his minor children. Also includes 59,748 shares held by a
trust for Mr. Sablosky's minor children under a Trust Agreement pursuant
to which he serves as a co-trustee. Mr. Sablosky disclaims beneficial
ownership of all securities held by other members of his household.
3
<PAGE>
(7) Includes the following shares issuable upon exercise of options which are
exercisable within 60 days of June 3, 1996:
<TABLE>
<S> <C>
Joseph W. Wood..................................................... 4,000
Steven J. Schneider................................................ 37,001
Donald E. Courtney................................................. 42,000
George S. Sanders.................................................. 7,700
Michael L. Marchetti............................................... --
Jonathan K. Layne.................................................. 7,000
Jeffrey H. Smulyan................................................. 7,000
</TABLE>
(8) This information is based solely on a Schedule 13G dated February 14, 1996
filed with the Securities Exchange Commission, a copy of which was provided
to the Company.
(9) Less than 1% of the shares of Class A Common Stock outstanding.
(10) The shares owned by each person, or by the group, and the shares included
in the total number of shares outstanding have been adjusted, and the
percentage owned (where such percentage exceeds 1%) has been computed, in
accordance with Rule 13d-3(d)(1) under the Securities Exchange Act.
ELECTION OF DIRECTORS
A Board of six directors is to be elected at the 1996 Annual Meeting. The
persons named in the Proxy Card as proxies for this meeting will vote in favor
of each of the following nominees as directors of the Company unless otherwise
indicated by the stockholder on the Proxy Card. Directors elected at the 1996
Annual Meeting will hold office until the next annual meeting of stockholders
of the Company, and until their successors are duly elected and qualified,
except in the event of their death, resignation, or removal. Management has no
reason to believe that any of the nominees will be unable or unwilling to serve
if elected. If any nominee should become unavailable prior to the election, the
accompanying Proxy Card will be voted for the election in his or her stead of
such other person as the Board of Directors may recommend.
NOMINEES
The nominees for election as directors of the Company are Alan H. Cohen,
David I. Klapper, David M. Fagin, Larry J. Sablosky, Jonathan K. Layne, and
Jeffrey H. Smulyan. See "Management--Executive Officers and Directors" for
additional information concerning the nominees.
BOARD OF DIRECTORS' RECOMMENDATION.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
SLATE OF NOMINEES SET FORTH ABOVE. PROXIES SOLICITED BY THE BOARD OF DIRECTORS
WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY OTHERWISE ON THEIR PROXY CARDS.
4
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
EXECUTIVE
OFFICER OR
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- ----------
<C> <C> <S> <C>
Alan H. Cohen............... 49 Chairman of the Board of 1976
Directors, President and Chief
Executive Officer
David I. Klapper............ 47 Executive Vice President, 1976
Director
David M. Fagin.............. 52 Executive Vice President, 1982
Secretary and Director
Larry J. Sablosky........... 47 Executive Vice President, 1982
Director
Joseph W. Wood.............. 48 Vice President and General 1995
Merchandise Manager
Steven J. Schneider......... 40 Vice President-Finance and 1989
Chief Financial Officer
Donald E. Courtney.......... 41 Vice President-MIS & 1989
Distribution
George S. Sanders........... 38 Vice President-Real Estate and 1994
Store Construction
Michael L. Marchetti........ 46 Vice President-Store Operations 1995
Jonathan K. Layne........... 42 Director 1992
Jeffrey H. Smulyan.......... 48 Director 1992
</TABLE>
Mr. Alan H. Cohen, a co-founder of the Company, has served as President and
Chief Executive Officer and a director of the Company since May 1982. Since
1976, Mr. Cohen has been involved in the athletic retail business as principal
co-founder of Athletic Enterprises, Inc. (one of the predecessor companies of
the Company). Mr. Cohen is an attorney, and practiced law from 1973 through
1981.
Mr. David I. Klapper, a co-founder of the Company, has as served as
Executive Vice President and a director of the Company since May 1982. Since
1976, Mr. Klapper has been involved in the athletic retail business as
principal co-founder of Athletic Enterprises, Inc. (one of the predecessor
companies of the Company).
Mr. David M. Fagin, a co-founder of the Company, has served as Executive
Vice President, Secretary and a director of the Company since May 1982. Prior
to 1982, Mr. Fagin was self employed as a manufacturer's representative for
sporting goods companies. Mr. Fagin has been involved in the athletic retail
industry for over 25 years.
Mr. Larry J. Sablosky, a co-founder of the Company, has served as Executive
Vice President and a director of the Company since May 1982. Prior to 1982,
Mr. Sablosky was employed in a family retail business for over 10 years. Mr.
Sablosky has been involved in the retail industry for over 20 years.
Mr. Joseph W. Wood, has served as Vice President and General Merchandise
Manager of the Company since January 1995. From May 1993 to December 1994, Mr.
Wood served as Executive Vice President and Chief Operating Officer of Just
For Feet, a superstore athletic footwear retailer. From October 1986 to May
1993, Mr. Wood served as Senior Vice President and General Merchandise Manager
of the Athlete's Foot Group, a mall based athletic footwear retailer.
Mr. Steven J. Schneider, has served as Vice President-Finance and Chief
Financial Officer of the Company since April 1989. From August 1984 to March
1989, Mr. Schneider was employed as Assistant Controller for Paul Harris
Stores, Inc. a women's apparel retailer. Mr. Schneider, a Certified Public
Accountant, was employed by a national accounting firm for two years and has
been engaged in various financial positions in the retail industry for 15
years.
Mr. Donald E. Courtney has served as Vice President-MIS and Distribution of
the Company since August 1989. From August 1988 to August 1989, Mr. Courtney
served as Director of MIS and Distribution for the Company. From August 1976
to August 1988, Mr. Courtney was employed by Guarantee Auto Stores, Inc., an
5
<PAGE>
automotive retailer. At the time Mr. Courtney left Guarantee Auto Stores, he
held the position of Vice President-MIS and Distribution. Mr. Courtney has
been involved in the retail industry for 18 years.
Mr. George S. Sanders has served as Vice President-Real Estate and Store
Construction since April 1994. From February 1993 to April 1994, Mr. Sanders
served as Director of Real Estate of the Company. From 1983 to February 1993,
Mr. Sanders was employed by Melvin Simon and Associates, a real estate
developer and manager. At the time Mr. Sanders left Melvin Simon and
Associates, he held the position of Sr. Leasing Representative.
Mr. Michael L. Marchetti has served as Vice President-Store Operations since
September 1995. From May 1990 to September 1995, Mr. Marchetti was employed by
Champs Sports, a division of Woolworth Corporation, the last five years which
he served as Regional Vice President. Mr. Marchetti has been involved in the
retail industry for over 25 years.
Mr. Jonathan K. Layne has served as a director of the Company since June
1992. Mr. Layne has been a partner of the law firm of Gibson, Dunn & Crutcher
LLP since 1987, where he specializes in corporate and securities law matters.
Mr. Layne was an associate with Gibson, Dunn & Crutcher from 1979 to 1986. Mr.
Layne is also a member of the Board of Directors of Amwest Insurance Group,
Inc., an insurance holding company, K-Swiss Inc., a manufacturer of athletic
footwear and Maxwell Shoe Company Inc., a manufacturer of women's casual and
dress footwear.
Mr. Jeffrey H. Smulyan has served as a director of the Company since June
1992. Mr. Smulyan has served since 1986 as Chairman of the Board and President
of Emmis Broadcasting Corporation, an owner and operator of radio stations.
Mr. Smulyan served as Chairman of the Seattle Mariners professional baseball
team from 1989 until 1992 and was the principal owner of Seattle Baseball,
L.P., which owned the Mariners prior to their sale in July 1992.
Each director holds office until the next annual meeting of stockholders or
until his successor has been elected and qualified. Officers are appointed by
and serve at the discretion of the Board of Directors. There are no family
relationships among any directors or executive officers of the Company.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held 4 meetings in fiscal 1996 and all directors
attended at least 75 percent of the meetings of the Board and Board Committees
of which they were members.
The Board of Directors has two committees. The Audit Committee is comprised
of Messrs. Cohen, Layne, and Smulyan. The Compensation and Stock Option
Committee is comprised of Messrs. Smulyan and Layne. There is no committee
performing the function of a Nominating Committee.
The Audit Committee met three times during fiscal 1996. The responsibilities
of the Audit Committee include recommending to the Board the selection of the
independent auditors and reviewing the Company's internal accounting controls.
The Audit Committee is authorized to conduct such reviews and examinations as
it deems necessary or desirable with respect to the Company's accounting and
financial practices and policies, and the relationship between the Company and
its independent auditors, including the availability of Company records,
information and personnel.
The Compensation and Stock Option Committee also met three times during
fiscal 1996. The Compensation and Stock Option Committee focuses on executive
compensation, the administration of the Company's stock option and stock
purchase plans and making decisions on the granting of discretionary bonuses.
6
<PAGE>
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation paid by the
Company for services rendered during fiscal years 1996, 1995, and 1994 for the
person who was Chief Executive Officer at the end of the last fiscal year and
the five most highly compensated executive officers of the Company ("Named
Officers") whose salary and bonus exceeded $100,000 in fiscal year 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------
AWARDS PAYOUTS
------------------------ -------
ANNUAL COMPENSATION SECURITIES
------------------- RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS STOCK OPTIONS/SAR'S PAYOUTS COMPENSATION
POSITION YEAR ($)(1) ($)(2) AWARD(S) $ (#) ($) ($)(3)
------------------ ---- --------- --------- ---------- ------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan H. Cohen........... 1996 265,000 116,706 -- -- -- --
CEO, President and 1995 250,000 90,000 -- -- -- 30,000
Chairman of the Board 1994 250,000 42,511 -- -- -- 29,193
Larry J. Sablosky....... 1996 225,000 99,090 -- -- -- 17,879
Executive Vice 1995 250,000 90,000 -- -- -- 30,000
President 1994 250,000 30,788 -- -- -- 29,193
Joseph W. Wood.......... 1996 172,632 80,685(4) -- 5,000 -- --
Vice President-General 1995 26,559 -- -- 40,000 -- --
Merchandise Manager 1994 -- -- -- -- -- --
David I. Klapper........ 1996 175,000 51,380 -- -- -- 17,879
Executive Vice 1995 250,000 90,000 -- -- -- 30,000
President 1994 250,000 42,511 -- -- -- 29,193
David M. Fagin.......... 1996 175,000 51,380 -- -- -- 17,879
Executive Vice 1995 250,000 90,000 -- -- -- 30,000
President, and 1994 250,000 30,805 -- -- -- 29,193
Secretary
</TABLE>
- --------
(1) For the period from the closing of the Company's initial public offering
on June 16, 1992 through the end of fiscal 1995, Messrs. Cohen, Klapper,
Fagin and Sablosky were compensated at an annualized base rate of
$250,000.
(2) Cash bonuses for services rendered in fiscal year 1996 have been listed in
the year earned, however the stated amounts were actually paid in the
subsequent fiscal year.
(3) The stated amounts are Company contributions to The Finish Line, Inc.
Profit Sharing Plan. Mr. Cohen elected not to participate in the plan for
plan year ended October 31, 1995. Mr. Wood was not eligible to participate
in the plan during his first year of employment.
(4) $30,000 of the stated amount was paid in January 1996 as a signing bonus
which was paid at the end of Mr. Wood's first full year of employment.
DIRECTOR COMPENSATION
Directors who are employees of the Company are not compensated for serving
as directors. Directors who are not employees of the Company are paid $2,500
per annum and an additional $2,500 per meeting for attending regular meetings
of the Board of Directors and are reimbursed for expenses incurred in
attending regular, special and committee meetings. In addition, Directors who
are not employees of the Company receive options to purchase 3,000 shares of
Class A Common Stock upon their first election to the Board and an additional
2,000 options for each year they serve on the Board.
7
<PAGE>
OPTION GRANTS
Shown below is information with respect to options granted to Named Officers
for the last fiscal year.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
INDIVIDUAL GRANTS ASSUMED ANNUAL
------------------------------------------ RATES OF STOCK
NUMBER OF % OF TOTAL PRICE
SECURITIES OPTIONS APPRECIATION
UNDERLYING GRANTED TO FOR OPTION
OPTIONS EMPLOYEES EXERCISE TERM(4)
GRANTED IN FISCAL PRICE EXPIRATION ---------------
(1)(2) YEAR ($/SH)(3) DATE 5% 10%
---------- ---------- --------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Alan H. Cohen....... -- -- -- -- -- --
David I. Klapper.... -- -- -- -- -- --
David M. Fagin...... -- -- -- -- -- --
Larry J. Sablosky... -- -- -- -- -- --
Joseph W. Wood...... 5,000 1.8% $8.625 2/21/06 $27,121 $68,730
</TABLE>
- --------
(1) Options granted during fiscal year 1996 vest 10% one year, 20% two years,
30% three years and 40% four years after the date of grant (February 21,
1996).
(2) Options were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of employment.
(3) Options were granted at market value at the date of grant (the closing
price of the Company's Class A Common Stock on the NASDAQ National Market
System).
(4) Potential realizable value is based on the assumption that the common
stock price appreciates at the annual rate shown (compounded annually)
from the grant date until the end of the ten year option term. This value
is calculated based on requirements of the Securities and Exchange
Commission and does not reflect the Company's estimate of future stock
price growth.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
Shown below is information with respect to the unexercised options to
purchase the Company's Class A Common Stock under the Incentive Plan. No Named
Officers exercised any stock options during fiscal 1996.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT FY-END
AT FY-END (#) ($)(1)
SHARES ACQUIRED VALUE -------------- --------------
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- -------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Alan H. Cohen............... -- -- -- -- -- --
CEO, President and
Chairman of the Board
David I. Klapper............ -- -- -- -- -- --
Executive Vice President
David M. Fagin.............. -- -- -- -- -- --
Executive Vice President
Larry J. Sablosky........... -- -- -- -- -- --
Executive Vice President
Joseph W. Wood.............. -- -- 4,000 41,000 5,000 45,625
Vice President & GMM
</TABLE>
- --------
(1) Represents the difference between the closing price of the Company's Class
A Common Stock on the NASDAQ National Market System on February 28, 1996
($8.75) and the exercise price of the options.
8
<PAGE>
COMPENSATION AND STOCK OPTION COMMITTEE REPORT
SCOPE OF COMMITTEE'S WORK
The Compensation and Stock Option Committee of the Board of Directors (the
"Committee") administers the Company's 1992 Employee Stock Incentive Plan, as
amended, reviews the Company's compensation plans, programs and policies for
executive officers, monitors the performance and compensation of executive
officers and other key employees and makes appropriate recommendations and
reports to the full Board of Directors concerning matters of executive
compensation.
SUMMARY OF COMPENSATION POLICIES FOR CEO AND EXECUTIVE OFFICERS
The Company's philosophy is to maintain compensation programs which attract,
retain and motivate senior management with economic incentives which are
directly linked to financial performance and increased stockholder value. The
key elements of the Company's executive compensation program consist of a base
salary, potential for an annual bonus directly linked to overall Company
performance and the grant of stock options and other stock incentive awards
intended to encourage achievement of superior results over time and to
directly align executive officer and stockholder economic interests.
CEO COMPENSATION
The Committee believes the Chief Executive Officer's compensation should be
heavily influenced by Company performance. For the period from the closing of
the Company's initial public offering on June 16, 1992 through February 28,
1995, Mr. Alan H. Cohen, the Company's Chief Executive Officer, was
compensated at the annualized base rate of $250,000. For the latest fiscal
year, Mr. Cohen's base compensation was increased to $265,000. See "Executive
Compensation--Summary Compensation Table". In March 1995, the Committee
established a performance bonus program for Mr. Cohen (as well as for the
Company's other senior executive officers) which, for the fiscal year ended
February 29, 1996, was based on four factors:
1. Increase in 1996 income before taxes as compared to 1995 income before
taxes
2. Same store sales increases
3. Total sales increases
4. Total square footage from retail stores added
A bonus of between 0% and 60% of base compensation, up to a maximum of
$159,000 was payable under the program. The Committee believes this
arrangement provided the Chief Executive Officer (as well as the Company's
other senior executive officers) with significant incentive and aligned what
amounted to a bonus ($116,706 for fiscal 1996) equal to a meaningful
percentage (44% for fiscal 1996) of his annual base salary directly to the
Company's economic performance.
While the Committee believes that the use of stock options which vest over a
period of time are an effective device to link individual compensation with
increased stockholder values, because of Mr. Cohen's substantial equity
position in the Company (1,829,529 shares of Class B Common Stock as of June
3, 1996), Mr. Cohen requested that he not be eligible at the current time for
the grant of stock options or other incentive awards under the Company's
Incentive Plan. Consequently, no options or incentive awards were granted to
Mr. Cohen during fiscal 1996.
EXECUTIVE OFFICERS COMPENSATION
The Committee has adopted similar policies with respect to overall
compensation of the Company's other senior executive officers. The salaries of
Messrs. Klapper, Fagin, and Sablosky were identical to Mr. Cohen for the
period June 16, 1992 through February 28, 1995 ($250,000 on an annualized
basis). For fiscal 1996, Messrs. Klapper, Fagin, and Sablosky were compensated
at $175,000, $175,000 and $225,000, respectively.
9
<PAGE>
These salary levels were established by considering the salaries of similar
executives of comparable companies both within and outside the industry in
which the Company operates. Such executive officers were also eligible on the
same terms for the bonus program described above for Mr. Cohen. Finally, due
to their substantial equity positions in the Company, Messrs. Klapper, Fagin
and Sablosky (who owned as of June 3, 1996 1,829,529, 1,194,368, and 1,311,241
shares of Class B Common Stock, respectively), have also requested that they
not be eligible at the current time for the grant of stock options or other
incentive awards under the Incentive Plan. Consequently, no options or
incentive awards were granted to these executives during fiscal 1996.
The Company's Vice President and General Merchandise Manager, Mr. Wood, was
compensated at a base annual salary of $172,632 during fiscal 1996. In
addition, Mr. Wood participated in a bonus plan similar to the plan described
above, subject to a maximum bonus of 40% of annual base salary.
The Company's Chief Executive Officer and the other Named Officers were also
eligible to participate in the Company's Profit Sharing Plan currently up to a
maximum annual contribution of $30,000 per person for the Company's most
recent plan year ended October 31, 1995. See "Executive Compensation--Summary
Compensation Table".
Under current law, income tax deductions for compensation paid by publicly-
traded companies may be limited to the extent total compensation (including
base salary, annual bonus, restricted stock awards, stock options exercises,
and non-qualified benefits) for certain executive officers exceeds $1 million
in any one year. Under the law, the deduction limit does not apply to payments
which qualify as "performance based." To qualify as "performance based",
compensation payments must be made from a plan that is administered by a
compensation committee of the Board of Directors much is comprised solely of
two or more outside directors. In addition, the material terms of the plan
must be disclosed to and approved by stockholders, and the Committee must
certify that the performance goals were achieved before payments can be
awarded.
To the extent readily determinable, and as one of the factors in its
consideration of compensation matters, the Committee also considers the
anticipated tax treatment to the Company and to the executives of various
payments and benefits. However, since some types of compensation payments and
their deductibility depend upon the timing of an executive's exercise of stock
options rights (e.g., the spread on exercise of non-qualified options), and
because interpretations and changes in the tax laws and other factors beyond
the Committee's control may also affect the deductibility of compensation, the
Committee will not necessarily limit executive compensation to that which is
deductible under applicable provisions of the Internal Revenue Code. The
Committee will consider various alternatives to preserving the deductibility
of compensation payments and benefits to the extent reasonably practicable and
to the extent consistent with its other compensation objectives.
SUMMARY
The Committee believes that the current compensation arrangements provide
the Chief Executive Officer and the other executive officers with incentive to
perform at superior levels and in a manner which is directly aligned with the
economic interests of the Company's stockholders.
COMPENSATION AND STOCK
OPTION COMMITTEE
Jonathan K. Layne
Jeffrey H. Smulyan
June 3, 1996
10
<PAGE>
The above report of the Compensation and Stock Option Committee will not be
deemed to be incorporated by reference into any filing by the Company under
the Securities Act of 1933 or the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates the same by reference.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Smulyan and Layne comprise the Compensation and Stock Option
Committee.
Mr. Layne is a partner of the law firm of Gibson, Dunn & Crutcher LLP, which
has provided legal services to the Company. The Company expects that such law
firm will continue to render legal services to the Company in the future.
11
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
COMPARISON OF THIRTY-THREE MONTH CUMULATIVE TOTAL RETURN
AMONG THE FINISH LINE, INC.
S&P 500 INDEX AND PEER GROUP INDEX (1)
The Stock Price Performance Graph below shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement Period THE FINISH PEER MARKET
(Period Covered) LINE, INC. INDEX INDEX
- --------------------- --------------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-6/9/92 $100.00 $100.00 $100.00
2/26/93 $180.952 $141.224 $117.637
2/28/94 $77.381 $161.645 $139.216
2/28/95 $60.714 $126.091 $141.158
2/29/96 $83.333 $79.655 $196.808
</TABLE>
ASSUMES $100 INVESTED ON JUNE 9, 1992
AND ASSUMES DIVIDENDS REINVESTED THROUGH
FISCAL YEAR ENDING FEBRUARY 29, 1996
- --------
(1) Peer group is: SIC Codes 5940 through 5949 (17 actively trading issues
during relevant period). SIC codes beginning with 594 represent
miscellaneous Shopping Goods Stores which, in management's opinion, most
closely represents the peer group of the Company.
(2) The first day of trading of the Company's Class A Common Stock on the
NASDAQ National Market System.
12
<PAGE>
EMPLOYEE INCENTIVE STOCK OPTION PLAN
General
On March 27, 1992, the Board of Directors adopted the 1992 Employee Stock
Incentive Plan (the "Incentive Plan"), the purpose of which is to enable the
Company to attract, retain and motivate its employees by providing for or
increasing their proprietary interest in the Company. The Incentive Plan was
amended by the Board of Directors on April 20, 1995 and by the Company's
Stockholders on July 20, 1995 to increase the maximum number of shares of
Class A Common Stock issuable from 500,000 to 850,000. Any person who is
employed by the Company or any subsidiary of the Company is eligible to
participate in the Incentive Plan. As of June 3, 1996, approximately 4,000
persons were eligible.
The Incentive Plan authorizes the issuance of up to 850,000 shares of Class
A Common Stock, subject to adjustments under certain circumstances. As of June
3, 1996, options to purchase an aggregate of 569,550 shares of Class A Common
Stock at an average exercise price of $9.23 per share had been granted under
the Incentive Plan to a total of 85 persons leaving 280,450 options available
for future grant. Included in these grants are options to purchase an
aggregate of 208,999 shares granted to five executive officers at an average
exercise price of $9.31. Of these options, 14,999 have been exercised at an
average price of $10.25 per share. All unexercised options, including those
granted to the executives above, total 529,651 shares and vest over the
following years:
<TABLE>
<CAPTION>
#
SHARES
-------
<S> <C>
Currently Vested................. 144,256
Vest During FYE 2/1997........... 29,220
Vest During FYE 2/1998........... 135,263
Vest During FYE 2/1999........... 118,813
Vest During FYE 2/2000........... 102,099
</TABLE>
The Incentive Plan provides that it shall be administered by the
Compensation and Stock Option Committee consisting of two or more directors,
each of whom is a "disinterested person." A "disinterested person" is
generally one who is not eligible and has not been eligible at any time within
one year prior to becoming a member of the Compensation and Stock Option
Committee for selection as a person to whom benefits may be granted pursuant
to the Incentive Plan or any other non-formula plan of the Company or any of
its affiliates. Subject to the provisions of the Incentive Plan, the
Compensation and Stock Option Committee has full and final authority to select
employees to whom awards will be granted thereunder, to grant such awards and
to determine the number of shares to be sold or issued pursuant thereto and
the terms and provisions of such awards, including, without limitation, the
terms relating to vesting, exercise price and form of payment.
The Incentive Plan authorizes the Compensation and Stock Option Committee to
award eligible employees any type of benefits that may involve the issuance of
shares of Class A Common Stock or other benefits that are derived from the
value of shares of Class A Common Stock. Benefits are not restricted to any
specified form or structure and may include, without limitation, stock
bonuses, restricted stock, stock options, and other benefits. Any award may
consist of one such arrangement or two or more of them in tandem or in the
alternative. On May 30, 1996, the last sale price of the Company's Class A
Common Stock on the NASDAQ National Market System was $26.38 per share.
No awards may be granted under the Incentive Plan after March 27, 2002, and
no shares of Class A Common Stock may be issued under the Incentive Plan after
March 27, 2012.
The Incentive Plan may be amended or terminated by the Board of Directors at
any time; provided, however, that no such amendment or termination can deprive
the recipient of an award granted under the Incentive Plan, without the
consent of such recipient, of any of his or her rights thereunder or with
respect thereto.
13
<PAGE>
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
General
On July 21, 1994, the stockholders adopted the Non-Employee Director Stock
Option Plan (the "Director Plan"), the purpose of which is to enable the
Company to attract, retain and motivate its non-employee directors by
providing for or increasing their proprietary interest in the Company. Any
non-employee director of the Company or any subsidiary of the Company is
eligible to participate in the Director Plan. As of June 1, 1996, two persons
were eligible.
The Director Plan authorizes the issuance of up to 75,000 shares of Class A
Common Stock, subject to adjustments under certain circumstances. As of June
3, 1996, options to purchase an aggregate of 14,000 shares of Class A Common
Stock at an average exercise price of $9.86 per share had been granted under
the Director Plan to a total of two persons. Of these options, none have been
exercised. The unexercised options total 14,000 shares and vest over the
following years:
<TABLE>
<CAPTION>
# SHARES
--------
<S> <C>
Currently Vested................ 10,000
Vest During FYE 2/97............ 4,000
</TABLE>
The Director Plan is intended to meet the requirements of Rule 16b-3(c) (2)
(ii) adopted under the Securities Exchange Act of 1934 (or its successor) and
accordingly is intended to be self-governing. To this end, the Director Plan
requires no discretionary action by any administrative body with regard to any
transaction under the Director Plan. To the extent, if any, that any questions
or interpretation arise, they will be resolved by the Board.
Upon initial election or appointment of any non-employee director to the
Board or upon a continuing director becoming a non-employee director, such
non-employee director will become eligible to receive an option to purchase
3,000 shares of the Company's Class A Common Stock to be granted on the date
of the next Annual Meeting of Stockholders pursuant to the terms and
conditions described in the Director Plan.
In addition, each non-employee director will be automatically granted, on a
annual basis, a non-qualified stock option to purchase 2,000 shares of the
Company's Class A Common stock on the date of each Annual Meeting of
Stockholders commencing with the Annual Meeting of Stockholders at which the
non-employee director is granted the 3,000 share option pursuant to the
foregoing paragraph. The per share exercise price of the option will be the
fair market value of a share of the Company's Class A Common Stock on the date
of grant, defined as the closing price of the Company's Class A Common Stock
on the NASDAQ National Market System (or such other securities market on which
the Company's Class A common Stock is primarily traded on such date). Each
option will have a term of ten years and shall become fully exercisable one
year after grant. On May 30, 1996, the last sale price of the Company's Class
A Common Stock on the NASDAQ National Market System was $26.38 per share.
No awards may be granted under the Director Plan after July 21, 2004, and no
shares of Class A Common Stock may be issued under the Director Plan after
July 21, 2014.
The Director Plan may be amended or terminated by the Board of Directors at
any time; provided, however, that no such amendment or termination can deprive
the recipient of an award granted under the Director Plan, without the consent
of such recipient, of any of his or her rights thereunder or with respect
thereto.
14
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young was the Company's certified public accountant for fiscal 1996.
During fiscal 1996, the Company also engaged Ernst & Young to render certain
non-audit professional services involving assistance on tax planning matters
and general consultations.
The appointment of auditors is approved annually by the Board of Directors
which is based in part on the recommendation of the Audit Committee. In making
its recommendation, the Audit Committee reviewed both the audit scope and
estimated audit fees for the coming year. Ernst & Young has been selected by
the Audit Committee and the Board of Directors for the current year.
Stockholder approval is not sought in connection with this selection. Each
professional service performed by Ernst & Young during fiscal 1996 was
reviewed, and the possible effect of such service on the independence of the
firm was considered, by the Audit Committee. Representatives of Ernst & Young
plan to be present at the Annual Meeting of Stockholders and will be given an
opportunity to make a statement if they desire to do so and will respond to
questions from stockholders.
PROPOSALS OF STOCKHOLDERS
Proposals which stockholders intend to present at the 1997 Annual Meeting of
Stockholders of the Company must be received by the Secretary of the Company
at its principal offices (3308 N. Mitthoeffer Road, Indianapolis, Indiana
46236) no later than February 28, 1997.
MISCELLANEOUS
The Company's Annual Report to Stockholders for the fiscal year ended
February 29, 1996, including the financial statements and related notes
thereto, together with the report of the independent auditors and other
information with respect to the Company, accompanies this Proxy Statement.
The Company is not aware of any other business to be presented at the 1996
Annual Meeting. If matters other than those described should properly arise at
the meeting, the proxies will vote on such matters in accordance with their
best judgments.
By Order of the Board of Directors,
/s/ David M. Fagin
David M. Fagin,
Executive Vice President and
Secretary
Indianapolis, Indiana
June 7, 1996
15
<PAGE>
THE FINISH LINE, INC.
CLASS A COMMON STOCK
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, JULY 18, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 18, 1996 AT 9:00 A.M.
IN THE FINISH LINE RETAIL STORE LOCATED AT 49 W. MARYLAND,
INDIANAPOLIS, INDIANA 46225
ON THE THIRD FLOOR OF THE CIRCLE CENTRE MALL IN DOWNTOWN INDIANAPOLIS
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and the accompanying Proxy Statement for the 1996 Annual Meeting
and, revoking all prior Proxies, appoints Alan H. Cohen and Steven J. Schneider,
and each of them, with full power of substitution in each, the Proxies of the
undersigned to represent the undersigned and vote all shares of Class A Common
Stock of the undersigned in The Finish Line, Inc. at the Annual Meeting of
Stockholders to be held on July 18, 1996, and any adjournments or postponements
thereof upon the following matters and in the manner designated on the reverse
side of this proxy card.
(CONTINUED ON OTHER SIDE)
<PAGE>
A [X] Please mark your
votes as in this
example.
FOR all nominees WITHHOLD
listed at right AUTHORITY
(except as marked to vote for all
to the contrary below) nominees listed Nominees: Alan H. Cohen
David M. Fagin
1. Election of [ ] [ ] David I. Klapper
Directors Jonathan K. Layne
(INSTRUCTION: to withhold authority to vote for any Larry J. Sablosky
individual nominee, write that nominee's name on the Jeffrey H. Smulyan
space provided below.)
- -----------------------------------------------------
2. To transact such other business as may properly come before the meeting or
any adjournments or postponements thereof and as to which the undersigned
hereby confers discretionary authority.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED IN THE PROXY
STATEMENT, AND ACCORDING TO THE JUDGMENT OF THE PROXIES WITH RESPECT TO
PROPOSALS 2.
PLEASE MARK, SIGN, DATE AND MAIL THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
SIGNATURE(S) Dated: , 1996
--------------------------------------------- ----------
Note: Please sign as name(s) appears. Executors, administrators, guardians,
officers of corporations, and others signing in a fiduciary capacity
should state their full title as such.
